www.buddhaair.com

company profile 2 0 0 6 Buddha Air is among the best schedule flight operators of Beech 1900D aircrafts in the world.

As mentioned in the technical audit of Raytheon Aircraft Credit Corp (More than 600 Beech aircrafts are operated in more than 40 countries worldwide) profileCOMPANY

Name of the Company Buddha Air

Year of Establishment 11.10.1997

Executive Chairman Surendra Bahadur Basnet

Managing Director Birendra Bahadur Basnet

Type of Business Scheduled Flight Service

No. of Aircraft Six

Type of Aircraft Pressurized Beech 1900D and 1900C

No. of Sector Destinations Mountain Flight Bhadrapur Bhairahawa Janakpur Simara Bharatpur Dhangadi finance

inance Department is divided into F Revenue and Expense Division. BHA has 23 staffs in the Finance Department. We use our own Accounting Software. Buddha Air practices dynamic budget system, which monitors the cost of operation by the hour. Computerized accounting system has less than 1% bad debt outstanding in the Revenue Division.

Buddha Air has contributed US$ 4.66 million as direct and indirect taxes since inception.

Buddha Air practises dynamic budget system, which monitors the cost of operation by the hour Details of Direct & Indirect Tax Period form 1997/98 To 2004/05

Indirect Tax Fiscal Year Direct Tax (Corp.) (VAT & TDS) NRs. NRs. Up to FY 1997/98 4,921,901.00 93,739,258.00 FY 2003/04 60,446,298.00 50,526,317.00 FY 2004/05 6,380,445.00 57,914,317.00 FY 2005/06 (Prov.) 8,633,021.00 67,154,000.00

Total >> 80,381,665.00 269,333,892.00 Grand Total >> 349,715,557.00 Total Tax Contribution in USD (@ 75)>> 4,662,874.00

TAX_IN & DIR.xls Sheet3 (managementmis information system)

anagement Information System was 5. Personnel and Payroll System M set up with a vision to capitalize the 6. Human Resource Management rapid progress in Information system and 7. General Inventory System communications. Our company has been 8. Operation and Crew Planning System enjoying the edge of prompt decision- 9. Engineering Inventory System making, strategic planning and ready to 10. Engineering Planning System cope with the challenges, hurdles and 11. Royal Club Frequent Flier System competitiveness placed by other competitors through MIS. Computer for every desktop staff is our

We have computerized almost all the major motto. So far we have been successful in functions, which has to be carried out for providing computer for every staff in our smooth operation of an . Following are Head Office, Engineering office and Sales the modules, which we have developed: office. Buddha Air has been enjoying this level of popularity only because of prompt 1. Finance and Budget Control System and proper decision by its management, 2. Revenue Accounting System which is due to our Management Information 3. Local Reservation System Systems. 4. Comparative Market Research System Buddha Air has computerized system for almost all the major functions which has to be carried out in order to run an airline smoothly. engineering

ngineering Department main objective is to E maintain all Buddha Air’s aircrafts in airworthy condition as stipulated by CAAN and the aircrafts manuals provided by the manufacturer. In order to run the department smoothly, it is sub divided into various divisions like: Maintenance Division, Maintenance Planning, workshops, Quality assurance, Technical Records, Library, procurement and stores.

Quality Assurance Division monitors various functions laid down by CAA of and the manufacturer. QA conducts internal audit regularly to make sure all things within engineering are satisfactory.

Buddha Air has a large stock of components worth more than US $ 2.5 million including 2 engines, 3 propellers, 3 landing gears, gyros, ACM, Heat Exchanger, etc. and all special tools, testing equipments and ground support equipments required for our aircrafts. All this helps us to maintain our on time departure by 99%.

Regular audits from CAA of Nepal, Raytheon Aircraft Company and Pratt & Whitney Canada are conducted annually and we do not have any outstanding discrepancies.

Currently, 9 Airframe & Engine and 4 Electronic, Instrument & Radio engineers are working in the Engineering Department, there are a few more in the training process in the Technician group. All these engineers are trained in Raytheon Maintenance Training Center, Flight Safety International Wichita USA and Pratt & Whitney Canada, Singapore Training Center. All engineers are given regular refresher course at the above training center. There are 25 technicians to assist in this Department.

We have workshop to carry out jobs like wheel- brake assembly, NDT, fuel nozzles and filters cleaning, battery shop etc. We carry out all private NDT requirements, as we are the only one qualified to carry out this job in Nepal. All our fuel nozzles and filters are cleaned through ultrasonic and electro sonic cleaners to remove dirt and carbon deposits. operation

uddha air employs nineteen responsible for imparting the B commanders including four annual five training requirements instructors Pilot and twenty-two First of CAA of Nepal and one internal Officers, thus eliminating cumulative training based on CTS (Computer and/or over fatigue of pilots; the Training Systems), which is specially main reason for aviation accidents developed for the B1900 series and all over the world. All commanders keeping the license of all the crew have about 4,000 hours experience current. in Beech 1900s and over 8,000 hours overall. All of them have completed BA has fulfilled all Civil Aviation their flying courses from reputed requirements regarding security institutions in the, USA. system of the airport for the protection of the aircraft, passengers, BA has established and obtained crew, airport staff and facilities. approval of Beech 1900s type rating training of the flight crewmembers Operation library of BHA has world and flight dispatcher from Civil famous Jeppesen audio-visual Aviation Authority of Nepal. BHA's training aids and reference books. aims and objectives with these Well maintained library room, training programs are to ensure: instrument procedure training- a  Crewmembers are kept up-to- composite system of computer date in respect to the aircraft flight controls and special software being flown, training materials are enhance the knowledge of flight provided regularly and regular crew of Buddha Air. examinations are conducted.  Approved instructor pilots are All commanders hold the Airlines utilized for flight training, flights transport License and are required checks and simulator training to undergo pilot proficiency checks programs. twice a year. All crewmembers  Emergency training is provided hold the Commercial Pilot License as set forth in the flight Operation and are required undergo pilot Requirement of the Civil Manual proficiency checks once a year. In of the company. additional, all crewmembers are sent for a simulator-training program to Two specialized divisions have been Bangkok once a year. created for enhancing safety and providing quality training to all All BHA crewmembers have crewmembers. The Chief of flight instrument rating endorsed into their Safety Division is responsible for flight license. Cockpit crewmembers and safety and accident prevention cabin crewmembers are provided programs implementation. The refresher courses on safety aspects reading of ADAS (Air Data Acquisition of the flight and in providing a System) and FDR (Flight Data Record) comfortable flying atmosphere to are downloaded every month so passengers. that any parameter that has been exceeded by any crew is identified For better flight dispatch reliability, BA and corrective measure is taken, employs four flight dispatchers who which none other airlines in Nepal do. hold licenses from the Civil Aviation of Thailand as well as Nepal. The Chief of Training Division is No. of Flights Comparison

97/98 25,000 98/99 99/00 20,000 00/01 01/02 15,000 02/03 03/04 10,000 04/05 05/06 5,000 Proj.(06/07)

- Flights marketing

he current domestic market share of Buddha Air is 50.6 %. Marketing Department Tis one of the vital parts of the Company and the most number of staff are employed here. Our first and foremost responsibility is to satisfy our passengers and to do that by interacting with all the time and take their feedback to better our Local Passenger Comparison 350,000 97/98 98/99 99/00 performance. We also decimate information of our Company to different tour 300,000 00/01 01/02 02/03 03/04 250,000 04/05 05/06 operators as well as direct passengers though different means. Our quarterly in-flight Proj.(06/07) 200,000 magazine “Buddha Yatra” (Buddha Air’s travel) is in its third year and we distribute 150,000 15,000 copies per issue. We have a dedicated form for the passengers comment 100,000 50,000 and we diligently look into every comment and rectify our shortcomings. - Local Pax

Market Share Comparison for (98/99) with other operators Foreign Passenger Comparison

Note : 04/05 figures include only 9.5 months data 60 50,000 45,000 97/98 98/99 40,000 99/00 00/01 50 35,000 Buddha Air 01/02 30,000 02/03 RNAC 03/04 25,000 Gorkha Airlines 04/05 40 20,000 05/06 Lumbibi airways 15,000 Proj.(06/07) 10,000 30 Yeti air 5,000 - 20 Foreign Pax

Total Passenger Comparison 10 400,000 Note : 04/05 figures include only 9.5 months data 97/98 - 350,000 98/99 99/00 300,000 Market Share in % 00/01 01/02 250,000 02/03 200,000 03/04 Market Share Comparison for (99/00) with other operators. 04/05 150,000 05/06 Proj.(06/07) 100,000 50 50,000 45 Necon Air - Buddha Air Total Pax 40 RNAC Gross US$ Revenue Comparison 35 Cosmic Air Gorkha Airlines 5,000,000 97/98 30 4,500,000 Note : 04/05 figures include only 9.5 months data 98/99 Lumbini Air 4,000,000 99/00 25 00/01 3,500,000 Yeti air 01/02 20 Shangrill Air 3,000,000 02/03 2,500,000 03/04 04/05 15 2,000,000 05/06 Proj.(06/07) 10 1,500,000 1,000,000 5 500,000 - - Gr. US$ Revenue Market Share in %

Note : 04/05 figures include only 9.5 months data

Market Share Comparison for (01/02) with other operators.

40 35 Necon air 30 Buddha Air Cosmic Air 25 Mountain air Shangrill Air 20 RNAC 15 10 5 - Market Share in % Market Share Comparison for (04/05) with other operators.

50 45

40 Buddha Air Cosmic Air 35 Yeti Air 30 25 20 15 10 5 - Market Share in % Market Share Comparison for (02/03) with other operators. Note : 04/05 figures include only 9.5 months data

Market Share Comparison for (05/06) with other operators. 50 Buddha Air 45 Necon air 50 40 Cosmic Air 35 Mountain air 45 Buddha Air Cosmic Air 30 RNAC 40 Yeti Air Sita Air 25 Gorkha 35 20 Sita 30 15 shangrilla 25 10 5 20 - 15 Market Share in % 10 5 - Market Share in % Market Share Comparison for (03/04) with other operators.

60 Buddha Air Cosmic Air 50 Sita 40 Gorkha skyline 30 RNAC yeti 20 Necon air shangrilla 10

- Market Share in % what is the royal club

After much research, technical capability up gradation and groundwork, Buddha Air launched Royal Club, our frequent flyer program over three years ago, which is totally FREE and the main objective is to provide value to frequent flyers through a multi pronged strategy.

Currently, we have 35,000 Royal Club gold card members and 1,250 Platinum members. This figure clearly indicates that our customer believe on us and our frequent flyer program. So far we’ve given away free tickets worth of NRs. 21, 420,400/- and shopping gift voucher totaling NRs. 1,

We are constantly adding more value to Royal Club, so that our members not only fly the best and most trusted airline in Nepal but also enjoy the best benefits too.

Package Amount total Code Amount

1 1000 264000 2 1500 400500 3 2500 437500 4 4000 796000

total >> 1898000 After evaluating the strip report and based on Buddha Air's maintenance performance, we have allowed them to increase the engine life of their Beech 1900D aircraft from 6000 hours to 8500 hours

PRAT & WHITNEY, Canada Every one in Buddha Air knows that Flight Safety starts on the ground. It starts with flight crew selection and training, in training methods and materials, in Aircraft selection and equipment and in following state of the art procedures at all times

(humanhrd resource department)

uman Resource Department of organization so as to improve overall environment becomes much better. H Buddha Air is one of the important administrative works efficiently and departments of this organization and effectively. SPMS is a computerized This is the first of its kind in Nepal and has been working to improve overall comprehensive personnel recruitment/ it took us two years to develop and administrative activities. evaluation system that governs the implement it. After the implementation total human resource of the Company. of this system our personnel are working Apart from regular jobs, HRD has Proper and justified evaluation of more coherently and are better initiated SPMS (Staff Performance each staff and due acknowledgment satisfied. Management System) program in the motivates them so that the work Buddha Air is renewing its Aviation Insurance for the 9th consecutive year in a row with zero claim

S. Department/ No. of No. Division Employees Finance Expense Division 08 1 Revenue Division 14 Airport Finance 02 MIS 2 MIS/Head Office 06 MIS/Sinamangal Office 01 3 HRD 04 Engineering Technical 38 4 Corporate 22 Engineering Stores 06 Operation Cockpit Crew 41 5 Cabin Crew 24 Operation Corporate 13 Marketing KTM Airport 53 City Sales Office 10 P.R.A. 04 Head Office Marketing 02 Inflight Magazing 01 Royal Club 02 Head Office Sales Counter 03 Reservation 20 6 Biratnagar Station 11 Pokhara Station 09 Bhairahawa Station 08 Nepalgunj Station 09 Bhadrapur Station 07 Janakpur Station 08 Simara Station 10 Bharatpur Station 06 Dhangadhi Station 02 G.S.D. G.S.D./Head Office 18 7 Transport 27 G.S.D./Sinamangal 02 Catering 03 Total Employees 394 mountain flight

Buddha Air offers a panoramic view of the Himalayas in just one hour.

ountain flight isfor those who are but also spirituality - Gauri-Shanker. Lord Shiva M restricted by time or other considerations (Shanker) and his consort Gauri are said to from going trekking or other activities go to Mt protect this mountain, at the proud height Enerest region, These flights offer a panoramic of 7,134 m, Gauri-Shanker is sharp and very view of the Himalayas in just one hour. Even conspicuous during the mountain flight. those visitors who like the rigors of a trek still Melungtse, a plateau like mountain, stretches don't miss the opportunity to "conquer" the up to 7,023 m. Chugimago at 6,297 m is still mountains in one swoop. a virgin, waiting to be climbed. At 6,956 m, Numbur mountain resembles a breast, the Travelers take off from Kathmandu in the early maternal source in the sky providing pure morning for an hour's worth of spectacular milk to the Sherpas of the Solukhumbu.. Next mountain scenery. As the aircraft lifts up and is Karyolung, an intensely white mountain at heads towards the east, passengers don't 6,511 m gleams with the rising sun. Cho-Oyu have to wait long to find out what's in store is the eighth highest mountain in the world. for them. reaching a height of 8,201 m, it appears stunningly beautiful from the aircraft. First to their far left visitors see Gosaithan, also called Shisha Pangma, standing at the Gyachungkhang, at a majestic height of majestic height of 8,013 m. To the right of 7,952 m, considered an extremely difficult Gosaithan, there appears Dorje Lakpa (6,966 climb. To the right of Gyachungkhang is m), a mountain that looks like the number 8 Pumori (7,161 m). passengers get closer lying down and covered with snow. To the to Everest, there's Nuptse (7,855 m), which right of Dorje Lakpa is Phurbi-Ghyachu, which means West Peak, signifying its direction looms over the Kathmandu Valley. from Everest. Finally there's Everest (8,848 m) itself, known as Sagarmatha by the Nepalese As the plane moves along, the mountains and Chomolungma by the Tibetans. Much come closer and closer. Next on the vision has already been written about Everest, but is Choba-Bhamare, the smallest one of the to actually witness it face to face during a lot at 5,933 m but singularly stubborn as it mountain flight is something else. Even while it has never been climbed. Then appears the looms there in front of the eyes, it remains an mountain that is not only prominent in sight enigma, the highest spot on earth. social service

Buddha Air feels that Corporate Social not want to dole out some cash for petty Once we gained the confidence of the Responsibility is the fundamental of being donations, which tends to make us more farmers, we were able to convince them involved in profit making activities. Every dependent rather than standing on our to form a cooperative so that they can entity has an obligation towards its society own two feet and becoming independent continue this work as well as introduce to make it better and Buddha Air is not economically. product banking. The fundamental exception. problem of our farmer is; they are not We started an agricultural extension getting the right price for their product When we become financially mature, we program in Tankisunwari VDC of Morang because the middlemen are very active in started thinking of identifying our segment to gain confidence of the local small this field and they have the gullible farmers of social responsibility and thought that scale farmers. We are able to increase in their account by providing loans when we need to focus on bringing some the production output by simply exposing they need at an astronomous interest rate economic change in the rural mass, the farmers to appropriate fertilizer that could go up to 60% per anum. which constitute of 85% of the population management, required technology based on agriculture economy. We did transfer and provision of good seeds. Our social responsibility is to break this vicious chain and get the farmers the best price of their product, so we introduced product banking for the farmers who were organized in this cooperative (which has been registered as per the cooperative act). The cooperative charges an interest of 12% per anum and provides loan to the farmers at the beginning of plantation for such requirements as seeds and fertilizers against the harvest. The farmers bank their harvest with the cooperative and will sell them when they get the best price, which is about 4-5 months after harvest.

We have already concluded a successful season of product banking for paddy last year, where a farmer gained almost 2 times taking into consideration the higher yield, saving in interest of the loan and better price of their product, which was sold about 4 months from the harvest.

Now, we are planning to support this cooperative but lobbying for funds for the product banking, which will cover the two Village Development Committee where this program is implemented.

Buddha Air

Head Office: P.O.Box 2167

Kathmandu, Nepal

Telephone: 977-1-5521015

Fax: 977-1-5537726

Email: [email protected]

City Sales Office Hattisar

Telephone: 977-1-4437025, 4437677

Fax: 977-1-4436033